In the midst of a pandemic, many holiday gift buyers will find their finances even tighter than usual. 

During the 2019 holiday season, a survey by American Research Group, Inc., found that the average American planned on spending roughly $976 on gifts. Throw in the costs of holiday cards, decorating, baking, holiday dinners and unplanned purchases, and holiday shopping can add up to a heap of change.

Many people are set back financially for months, if not longer, following the holiday season. One big reason for this is that credit cards make it easy to overspend, leaving individuals and families to suffer the consequences later. The problem with credit cards isn’t just the monthly payments. It’s the long-term cost from accrued interest.

So what can you do to ensure you start the new year without new debt?

1. Budget

Create a holiday budget, including gifts, food, decorations, wrapping supplies, potential travel and postage for holiday cards. Then review your list, and decide where you can cut costs.

Gifts to extended family and friends are an excellent place to start. Talk to those you exchange gifts with, and see if they’ll either forego the gift exchange or set a dollar limit. Another option for families or groups is to draw names, as this will reduce the number of gifts everyone has to buy. Doing a white elephant gift exchange is another fun alternative.

Planning your gift budget based on value rather than the amount to spend on each person is also an excellent way to reduce your holiday expense. Decide in advance on a gift value for each recipient. Then, look for great buys. Let’s say you’ve decided on a gift value of $50 for your sister. Now, try to find a gift that’s a $50 value but only costs you $30 or $40. If you have many gifts to buy, this can shave a lot of expense.

2. Pick up the phone

Do you usually send out more holiday cards than you receive? If so, opt instead for a phone call during the holiday season. Or, if you’ve learned the world of video calls, try a virtual hangout over Zoom or FaceTime. This is particularly meaningful for those you don’t talk to often, and it won’t cost you a thing. A third option is to only mail cards to those who send one to you.

3. The cookie monster isn’t coming

Cut back on the baking. When’s the last time you heard someone complain of a shortage of holiday goodies? Probably never. Most of us eat far more than we’d like to just because it’s there.

4. Host a potluck

If you’re hosting any parties, hold potluck dinners instead of playing head chef. You could offer to provide the meat, and then ask everyone to bring a specific type of dish to avoid duplicates.

5. Plan ahead

Plan your shopping before you head out the door. Do online research to find the best deals for the items on your shopping list. If you can’t find a good deal on something, consider an alternative. Also, check newspaper fliers and the coupon pages of the store websites you plan to shop at.

6. Leave that piece of plastic at home

If possible, leave credit cards at home when you go shopping to avoid impulse purchases. Many people spend far more than they intend by purchasing irresistible spur of the moment bargains.

Finally, if you use your credit card, try to make a realistic plan to double or triple your monthly payments. This will reduce your interest expense and quickly eliminate your debt.